Reliance to acquire METRO Cash and Carry India for Rs 4060 crore

Deal includes the acquisition of 31 wholesale distribution centres, land banks and other assets owned by Metro Cash and Carry.

Reliance struck a deal worth 500 Million euros (Rs 4060 crore) to acquire German wholesaler Metro AG cash and carry business in India. Deal includes the acquisition of 31 wholesale distribution centres, land banks and other assets owned by Metro cash and carry. Discussion for the sale of Metro was going on for the past few months with several interested bidders like Amazon, Swiggy, Udaan and others offering to buy. Amongst them, Siam Makro, part of the Charoen Pokphand Group of Thailand was a prominent bidder. However, Siam Makro announced its withdrawal from bidding last month. Reliance eventually beat its bidders since the German parent company agreed to the offer last week.

Metro Entered India in 2003 and currently operates in 34 countries. Metro Cash and Carry customers included retailers, kirana stores, hotels, restaurants and caterers (HoReCa), corporates, SMEs, companies and institutions. It has been incurring losses for years and hence decided to quit the Indian market. After the exit of French Carrefour in 2014, Metro is to become the second multinational retailer to quit from low margin B2B business in India. It aimed to sell its wholesale business 1.5 billion-1.7 billion euros. Although, it had to settle for less than half of its ask price.

RRVL (Reliance Retail Venturing Ltd.) is the holding company of the retail segment of Reliance Industries. RRVL had reported consolidated revenue of Rs 67.37 crore and a profit of Rs 1195.60 crore. Reliance will likely become the largest organised retailer in terms of store networks, and warehousing space with frontend and backend capabilities.

Last week, media reported that Reliance Retail is also planning to enter into the salon business and is in talks to buy a 49% stake in Naturals Salon & Spa. However, today Reliance clarified via a corporate announcement that there is no information which has not been announced to the stock exchanges and which should have been announced by the Company in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.